Priority Questions

Brexit Issues

Michael McGrath

Ceist:

36. Deputy Michael McGrath asked the Minister for Finance the customs arrangements that he and his Department expect to apply between the Republic of Ireland and Northern Ireland in the event that the United Kingdom leaves the customs union as part of its exit from the European Union; the impact he expects these customs arrangements will have on trade and the day-to-day movement of persons across the Border; and if he will make a statement on the matter. [10409/17]

This question follows an exchange we had at the Oireachtas finance committee recently about the nature of the customs border that may emerge, or be agreed, in the context of Brexit. There is a lot of concern on the island, and particularly around the Border counties, about the nature of the Border that will emerge over the course of these discussions if the UK leaves the customs union to which it is currently party. The Minister put some helpful information on the record in the committee in recent weeks following discussions he had with Revenue and I hope he can elaborate on that today and put on the record of the House how he envisages this developing over the months ahead.

The Government's headline priorities in response to Brexit are well known: minimising the impact on trade and the economy, protecting the Northern Ireland peace process, maintaining the common travel area and influencing the future of the European Union. It is quite clear that there are major challenges ahead for the EU, the UK and for Ireland.

The position in relation to the Border with Northern Ireland in the context of Brexit is very clear and has been articulated by the Taoiseach on several occasions. Continued freedom of movement, absence of a hard Border and minimal impact on business and trade are key objectives. The Government is clear that any manifestation of a hard Border would have very negative consequences. A key priority is to ensure the continued free flow of trade on the island and the need to avoid a hard Border. Clearly, in this regard the closer the trading relationship between the UK and EU is more generally, the better.

My Department has been preparing for the impact of Brexit since well before the referendum on 23 June 2016, with this work now intensified. The primary areas for the Department of Finance relate to the economic and financial sector implications stemming from Brexit. This work is being undertaken within the whole-of-Government framework established by the Department of the Taoiseach and will be an important input role to ensuring Ireland's interests are protected in the upcoming negotiations at EU level and in terms of minimising any adverse impacts on our economy.

The precise arrangements that will apply after Brexit will depend on the outcome of negotiations between the EU and UK after formal notification under Article 50.

I thank the Minister very much for his reply. A number of weeks ago, he spoke about a traffic light-type system, whereby the vast majority of goods going over the Border could be dealt with by way of electronic scanning. He also said that a small percentage of goods going over the Border might be subject to random physical checks. Given that the EU is already trading with third-party countries that are outside the customs union, there must be a precedent as to how this might work in practice. Whether we like it or not, the Border between the Republic and Northern Ireland is likely to become the border between the EU and a third-party country that will be outside the customs union. That has serious potential implications for the conduct of trade, cross-Border shopping and the day-to-day life of tens of thousands of people crossing the Border.

Can the Minister give his assessment of what are the options? We know that Revenue has been looking at different scenarios and contingencies. Where would the Government like to take this debate about the nature of a customs border on the island of Ireland?

The Government's policy position is clear. We want to continue with the invisible Border as it is now or to put it another way, we do not want any hard Border reimposed between ourselves and Northern Ireland. What I described in committee was not anything that would happen or is happening on the Border. I described how goods from third countries under WTO rules are now treated at the point of import into Ireland. I particularly referenced Dublin Port because many of the goods come in through there. I noted that with advances in technology, all the necessary documentary clearance is done electronically.

The Deputy referred to the traffic-light system. Some 92% of imported goods from third countries are now cleared electronically before they come to the port of import in Ireland. They pass through without further examination.

A further 6% of imported goods are in the orange category. In those cases, if the method of transport is by container the Revenue will expect a manifest of the contents to be supplied. Revenue checks the manifest but there is no physical inspection of the goods in that respect. Less than 2% of goods are physically examined at the port of import.

I thank the Minister for his reply. If the UK leaves the customs union and if there is no agreement on the conduct of trade, then the default position is World Trade Organization terms. That means there will have to be some control in place. It cannot mean there will be nothing in terms of the oversight and regulation of goods going over and back across the Border. We need to know what is the Government position on the use of technology, including electronic scanning. The Minister referred to imported goods coming through Dublin Port from third-party countries, some of which would be under WTO terms. Can that have practical effect across a land Border of up to 500 km with several hundred major and minor crossing points? Tens of thousands of people cross the Border every single day of the week. Can technology be deployed in such complex circumstances? I appreciate that this negotiation is only about to commence, but it would be useful for people to hear what is the Government's objective, recognising that the UK is likely to leave the customs union. That must mean something in terms of controlling the cross-Border movement of goods.

The Government's policy position on its approach to the negotiation has been expressed in our contacts with the UK authorities both at the political and Civil Service levels. It is that people, goods and services should pass without let or hindrance from North to South and vice versa and there will be no change in the present position. We know that the British negotiation position is to have a free trade agreement between the United Kingdom and the European Union. We suppose that they will make some progress in that negotiation and that if there is not a full free trade agreement, at least there will be something that would be significantly better than the default position of a World Trade Organization arrangement with the UK, treating them as absolute outsiders in a third-country category.

Effectively, therefore, we will have to wait to see what the results of the negotiations are. In the meantime, various Departments and State agencies are looking at the implications both of the free travel area and the invisible Border policy objective which we have. In that context, various options are being examined but it is not possible to make decisions until we see the outcome of the negotiations between the EU and the UK or until they are well advanced.

We are grouping Questions Nos. 37 and 40 in the names of Deputy Pearse Doherty and Deputy Michael McGrath. Can Deputy Doherty do the introduction? He has 30 seconds.

I was not notified that there was a grouping. Were we notified earlier on?

I am acting here as temporary Chairman and I am going by what has been given to me. I presume it was agreed.

It is not agreed by the Opposition. It is imposed on us.

I can only do what I have here, so I would ask the Deputy to introduce his question.

I did not see it. For the record, my priority question has been disallowed. The Minister will not answer questions on Project Eagle and a commission of investigation.

Everybody, including the Deputy, knows that the disqualification request is not a matter for the Minister. It is a matter for the Chair.

It is the Ceann Comhairle who decides on that issue, so I do not think it is fair for the Deputy to bring it up here in the Chamber when we are dealing with questions to the Minister for Finance.

I think it is perfectly fair.

The Deputy is wasting the time of the House. Will he please take it up with the Ceann Comhairle and not with me? I ask the Deputy to proceed and introduce his question please.

I am going to introduce my question.

Well, please introduce it. Thank you.

I will make reference to the fact that my priority question this month has been disallowed.

That is not an issue for me.

I am not satisfied because it is supposed to be hypothetical, as if customs control in terms of Brexit is not hypothetical also.

I see the Deputy is agitated about that issue, which is fair enough. I am asking him to take it up with the Ceann Comhairle, not here. Will he please proceed and introduce his question?

I will proceed if the Acting Chairman stops interrupting me. I have made my point.

You are continuing to make it. The Deputy has 30 seconds to introduce his question.

I would like the Deputy to withdraw the false allegation against me that I refused to answer his question.

I think he should because this is a matter for the Ceann Comhairle.

I did not say he refused.

I said the Minister will not answer because-----

The Deputy did what he always does - make false accusations.

Nobody claimed that. I said the Minister will not answer because the issue has been disallowed.

Can Deputy Doherty please resume his seat for a moment? The reality is that the Ceann Comhairle makes the rules. I have had questions disallowed by the Ceann Comhairle and I accept that. The Deputy should accept it now and move ahead. It is not for discussion here. I appeal to the Deputy to use his 30 seconds to introduce his question. He can take the issue up with the Ceann Comhairle.

I will do that at your invitation. I will also correct the record of the House, as you asked me to do.

For the record, what I have said is that my priority question in relation to Project Eagle has been disallowed. The Minister will therefore not answer questions on that. I am not asserting that it is the Minister who disallowed the question. Indeed, the Minister did answer questions at the committee before, so nobody should jump to conclusions, but I am not satisfied that this has happened. We will bring that up with the Ceann Comhairle.

That is fine. Please proceed with Question No. 37.

Tracker Mortgage Data

Pearse Doherty

Ceist:

37. Deputy Pearse Doherty asked the Minister for Finance if he will work with the Central Bank to ensure a deadline is set for all customers affected by the tracker rate mortgage scandal to receive full closure of their case along with redress and compensation; and if he will make a statement on the matter. [10016/17]

Michael McGrath

Ceist:

40. Deputy Michael McGrath asked the Minister for Finance if he has had discussions with the Central Bank regarding their tracker examination; the status of the reinstatement of the correct tracker rate for the affected customers; if the Central Bank probe will involve examining the way this issue arose across the banks in the first place including, for example, the minutes of meetings; and if he will make a statement on the matter. [10411/17]

The question before us concerns the Central Bank and the absolute scandal that 15,000 customers have found themselves in whereby they have been denied tracker mortgages. Some weeks ago, Sinn Féin used our Private Members' business time to bring this matter to the floor of the House. The motion, as amended, has been passed. Part of that motion was that the Central Bank would have a deadline in place to resolve this issue. People need to see light at the end of the tunnel. They need to know whether they will be part of the redress programme. They also need to know the compensation they will have. It is incredible that, as we speak, people are still expected to pay over the amount they should be paying to their financial institution.

I propose to take Questions Nos. 37 and 40 together.

The tracker mortgage examination is the most significant supervisory review undertaken in the context of the Central Bank's consumer protection remit.  It is a key priority for the bank and it is working to ensure that the examination is completed as soon as possible.

However, it is critical that each lender carries out a comprehensive and robust review, which achieves a fair outcome for all customers. While significant progress has been made, the Central Bank advises that due to the scale and complexity of the review, it will take some further time to complete.

Specific timelines have been set for all lenders to complete their internal reviews, and some lenders will have their internal reviews completed sooner than others depending on the size of their mortgage books and the complexities associated with them completing the examination. Based on current progress, the Central Bank expects that all relevant lenders will have identified affected customers by mid year and that they will progressively implement measures to address their situations with payment of redress and compensation. The processing and consideration of any customer appeals and the Central Bank's own assurance work is a process that may continue beyond that point for some lenders.

The Central Bank has set down a robust framework whereby lenders' internal reviews will be overseen by independent third parties. As part of the examination, the Central Bank has made clear what it expects of lenders in terms of redress and compensation to impacted customers, namely, lenders will ensure that harm is stopped at the earliest possible time once a group of impacted customers is identified, interest rates applied to impacted customers' accounts are to revert to the appropriate tracker interest rate or impacted customers are to be given the opportunity to revert to such a rate where relevant, redress should ensure that impacted customers are returned to the position they would have been in had lenders' failure not occurred, compensation that reflects the detriment suffered by the individual customer is to be provided by lenders and an additional payment is to be provided to the impacted customers to enable them to take independent professional advice regarding the redress and compensation offers made to them.

The framework of the examination has been designed to ensure that as and when groups of impacted customers are identified, in the first instance, the lender must stop charging the incorrect rate of interest on the customer's account to prevent any further detriment. The framework also requires lenders to establish an independent appeals process to deal with customers who are dissatisfied with any aspect of the redress package that they receive from lenders in respect of these matters.

The Central Bank has also advised that it will consider appropriate supervisory action, up to and including enforcement action, where necessary. All angles, including individual culpability, will be thoroughly investigated in the context of the legal framework. Enforcement measures will be deployed as appropriate, including investigating issues and taking cases under the Central Bank's administrative sanctions procedure together with the use of fitness and probity powers. Enforcement investigations of this type are detailed and forensic, routinely involving the scrutiny of thousands of documents and the conduct of interviews as part of the investigative process. To date the bank has concluded an enforcement investigation in respect of tracker mortgage failures identified at Springboard Mortgages Limited and imposed a monetary penalty of €4.5 million.

The Central Bank is also aware of the motion passed by Dáil Éireann on 26 January 2017 and it is noted that the Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach will invite the Bank to attend before it on a quarterly basis regarding the examination.

I thank the Minister for his response. He mentioned that the Central Bank has noted our motion. In his correspondence or dealings with the Central Bank, has it indicated that it will do as this House has asked of it? It was asked to set a deadline for each financial institution so that there is clarity as to when individuals will be restored to the correct rate, when arrears, which should not have built up, will be rectified and when payments will be made to those individuals in respect of the redress.

One of the big problems here is that these banks have been caught out robbing their customers. I have used that word again and again and sometimes I use it to be provocative, but that is what they did. The big concern here is that 15,000 individuals have been robbed by the banks. They attempted to take approximately €800 million from these individuals but did not get away with it. What are we going to do? Will it be just a slap on the wrist, a case of putting the money back and a fine for the institutions? Where is the individual responsibility here? Even though the Minister mentioned that individual culpability will be looked at I am not convinced that the Central Bank has carried out an investigation robust enough to actually look in those directions.

A real wrong was perpetrated on people here and that is why Deputies in this House continue to raise the issue. It is not a Mickey Mouse issue. I will bring the Minister's attention to an e-mail we received during the week from a customer of KBC who said that he is paying €600 extra per month above what he should be paying and has been doing so for the last seven years. He has paid, over that period, €50,000 more than he should have. That is the scale of this for some people. It is absolutely enormous and it is life changing.

What really frustrates me is that we cannot get access to very basic information. In the case of each bank, how many customers have they reinstated to the correct rate? There is no deadline on the banks to do that. There was a deadline to complete the assessment of their customers, to identify the accounts and so on, but there is no deadline on the reinstatement of the correct rate for customers. Even where customers are being reinstated we now have the new phenomenon of tracker rates of 3.67% in the case of AIB and 3.25% in the case of Permanent TSB, which is a farce. It is still going on. That is the problem. It will continue to be raised here until we can get answers to some very basic questions, which are not being answered by parliamentary question or whatever other means. I assume the Minister is frustrated too because he is not dealing with it directly; it is the Central Bank. Will the Minister share his thoughts with us?

I thought my answer was pretty full. To answer Deputy Doherty's question, specific timelines have been set for all lenders to complete their internal reviews. It is the most significant supervisory review undertaken in the context of the Central Bank's consumer protection remit. I assume, from the various answers I have given here, that when the Central Bank probed the matter, it found it was of a greater magnitude than had been expected and that it would have liked to have completed its work at an earlier date.

Since we talked about it here last, the Central Bank has assured me that it will be in direct contact with the Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach. I do not know whether it has done that. It also assured me that it would communicate some of the information that was sought by Deputies here directly, by way of letter. It was also informed by my officials of the committee's request for the Central Bank to attend before it on a quarterly basis to review the situation.

I agree with the Deputies. This was a scandalous situation. The Central Bank is addressing it in a very forthright way now. It has no intention of hiding anything and it wants to co-operate fully with the Deputies in this House who so ably raised this issue. The best forum to deal directly with the bank, rather than through me as the Minister with ultimate responsibility for the bank, is through the Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach.

The Minister mentioned that there are deadlines for each of the individual banks. None of that is public. If it is, perhaps the Minister will direct me to it. None of the customers knows that because they are ringing up to ask when they will be told what the redress scheme is, how they will be affected and when they will be back on the proper rates or proper payments. None of that is there so there has to be more forthright engagement from the Central Bank and the lenders with the customers. The reason we are questioning this here is because customers are being left short-changed.

There is another question here and we really need to deal with it. I know it is sensitive, but we need to ask how the Central Bank missed this. We need to ask ourselves, as a country, is it expected that the Central Bank would have enough resources, enough power and enough personnel to make sure that this issue would not arise? The assumption out there is that there is a consumer protection role. The Central Bank investigated this in 2011. It found one bank which had to restore more than 2,000 individual to tracker rates, yet five or six years later we have another 13,000 individuals. There are genuine questions we need to ask about the Central Bank, not just about its role in overseeing what is an internal bank-led review, which is wrong in itself.

Just to clarify, there is no deadline on putting customers back on the correct rate. There is a deadline for the banks to complete their assessment of their mortgage books, but we have it in writing from Bank of Ireland that no deadline has been imposed by the Central Bank on putting customers back on the correct rate. The priority now has to be ensuring that customers who were contractually entitled to a tracker rate are not on a made up tracker rate of 3.67% but, rather, a tracker rate that is relevant to the contract into which they entered initially.

Beyond all of that, we need to know how this issue was handled within the banks when they became aware of the problem. Not a single bank put up its hands, said it had found a problem and that it would address it. In each case, it was forced upon them by way of customers taking cases to the ombudsman or to court and the Central Bank eventually becoming involved. How is it that when this issue was first brought to the attention of banks or they identified it they did not put up their hands and deal with it?

I hope the Central Bank will go back to the minutes of meetings when the issue was discussed and examine the decisions that were made by banks not to confront and deal with the matter at that time. If the Central Bank is to carry out a proper probe, that is the level of detail into which it needs to go because the investigation has to be a watershed moment for the Central Bank and our banking system. If we cannot take issues at trust, we need to use the full powers that are at the disposal of the Central Bank.

There are four questions. In response to Deputy Doherty, the Central Bank, unlike Government Departments, decides on its staff complement and can increase it if it feels it is necessary to do so in order to fulfil its legal requirements. Given that it is a bank, it is very well funded. Each year it transfers a lot of excess profits to the Exchequer. Funding extra staff is not a problem.

Deputies Doherty and McGrath asked about the process. I have a note with information from the Central Bank. Once a customer who has been affected has been identified in the first instance, the lender must stop charging the incorrect rate of interest on the customer's account and then communicate this to the customer to ensure that any further customer detriment is stopped as early as possible. Once a full review of the customer's account is complete, and following external independent third-party assurance, the lender will then issue a letter to the customer explaining the nature of the error, the correct rate to apply to the customer's account and information on the next steps in the examination, including the redress and compensation process.

In response to Deputy McGrath's last point, the Central Bank has also advised that it will consider appropriate supervisory action, up to and including enforcement action, where necessary. All angles, including individual culpability, will be thoroughly investigated in the context of the legal framework. Enforcement measures will be deployed, as appropriate etc. as I stated in my original reply.

Credit Unions

Michael McGrath

Ceist:

38. Deputy Michael McGrath asked the Minister for Finance his views on the possibility of larger credit unions becoming involved in mortgage lending in a significant way; if his attention has been drawn to the fact that the current restrictions on long term lending are preventing this; and if he will make a statement on the matter. [10410/17]

This question relates to the future of credit unions, in particular the views of the Minister on whether larger credit unions should be given the opportunity to enter the mortgage market in a significant way and provide much-needed competition for our banking sector in the provision of residential mortgages.

My role as Minister for Finance is to ensure that the legal framework for credit unions is appropriate for the effective operation and supervision of credit unions. The Registrar of Credit Unions at the Central Bank is the independent regulator for credit unions. Within her independent regulatory discretion, the registrar acts to support the prudential soundness of individual credit unions, to maintain sector stability and to protect members' savings.

Credit unions can provide mortgages to members, within certain maturity limits contained in the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016, known as the regulations. The regulations set out the percentage of a credit union's loan book that can be outstanding for periods exceeding five and ten years, as well as limits on the maximum outstanding liability to an individual member.

Under the regulations issued by the Central Bank in January 2016, credit unions continue to be allowed to lend up to 30% of their loan book over five years and up to 10% over ten years, subject to a maximum maturity of 25 years. In addition, credit unions are able to apply to the Central Bank for an extension to their longer-term lending limits of up to 40% of their loan book over five years and up to 15% of their loan book over ten years. Approval is subject to conditions set by the Central Bank. There are 11 credit unions approved to avail of increased longer-term lending limits.

The Central Bank informs me that the December 2016 prudential return indicates that, for the sector overall, total gross loans over ten years amount to approximately 2.7% of total loans in the credit union sector compared to the limit of 10%, and 15% in some cases. The Central Bank has indicated that while it can see longer-term lending, including mortgages, as part of a balanced portfolio of total lending, in its analyses credit unions need to consider the impact of longer-term lending on interest margins, return on assets and on balance sheet structure as the issue of funding longer-term lending with short-term funding is a challenge for the credit union business model.

Additional information not given on the floor of the House

The Central Bank further informs me that consumer mortgage lending is an activity that has its own unique risk profile, and proposals to become involved in mortgage lending in a significant way must be supported by an evidence based business case. 

The Central Bank has no interest in assisting credit unions in getting into the mortgage market in any significant way. The Minister mentioned an overall figure of 2.7% of the loan book across the sector being out for a period greater than ten years. The figure is somewhat higher for a number of credit unions, but all it would take is a small number of mortgages for each individual credit union to get them over the 10% limit, which would mean that they would then be in breach of the rules. That is the reality. A small number of credit unions have had an increase of 15% in the limit regarding their loan book over a ten year period.

The reality is that for credit unions to get into the mortgage business in a significant way requires investment in underwriting and expertise. A certain amount can be done on a shared basis across the sector, but the current restrictions, which are a matter for the Minister and not just the Central Bank, are preventing them from doing that. We need competition in the mortgage market, and credit unions offer the potential for that.

We should not be under any illusions, however, given the current restrictions of 10% of lending over ten years. It is not possible for credit unions to get involved in the mortgage market in any serious way under the current rules.

The absolute priority for me with regard to the credit union movement is that members' deposits are safe and the risk of lending does not undermine members' deposits. I also believe that as the work of credit unions progresses and they move away from the threat of impairment in many cases to being active in the market again, the possibility of more extensive mortgage lending is not contrary to Government policy.

For example, the recent report of the Credit Union Advisory Committee, CUAC, provides a number of recommendations, one of which is to conduct a full review of lending limits. I have established an implementation group which is currently looking at those recommendations with a view to implementation, as appropriate. The implementation group consists of representatives from the Irish League of Credit Unions, the Credit Union Development Association, the Credit Union Managers' Association, the National Supervisors Forum, the Central Bank and a CUAC member. The implementation group is headed up by a Department official. One area which the implementation group is focusing on is an examination of lending and concentration limits. I look forward to progress reports from it.

I am not against it as a matter of principle. I need assurances that individual credit unions are capable of long-term lending funded by short-term deposits and that the savings of members are always secure.

The Minister will have to go beyond not being against it and instead proactively assist credit unions to become involved in the mortgage market. The business model of credit unions is under very significant pressure. They have very poor investment returns and their loan-to-asset ratio is in the region of 27%. They are feeling the burden of regulation quite severely.

The CUAC report acknowledged that one of the key recommendations of the commission on credit unions for tiered regulation has not been implemented.

There is a one size fits all approach to the regulation of the credit union sector which, in my view, is fundamentally inappropriate. I am glad that the Minister has finally moved to set up an implementation group to deal with the recommendations from the CUAC report. However, when it comes to mortgages, there will have to be a change in policy. Otherwise they will not be able to get into that market in a significant way. There is a number of large progressive credit unions that have dipped their toes in the mortgage market and it has worked well for them, but all it would take for them to go beyond their 10% or 15% limit is a very small number of mortgages. I hope the Minister takes an interest in the issue because we need to ensure that the business model of credit unions is developed and that there is a genuine strategy for the support and development of the sector which is not just focused on regulation.

I do not disagree with the Deputy's policy position in principle, but there is a risk and it must be ensured that it does not affect deposits. Over the past number of years, we can count on the fingers of both hands the number of credit unions that went under. Supposing that the credit union movement was mortgage lending from, say, 2008 on, how would it be fixed now given all the impaired loans that have occurred? How would depositors' savings be secure if there was a high level of impaired loans in the credit unions that was analogous to that in building societies and banks? It is not simple, but as a matter of principle I want the implementation group to advise on it and to see if we can move to a situation where our credit unions are involved in a wider profitable portfolio of activities which would include, if possible, longer term lending such as mortgages.

Mortgage Resolution Processes

Joan Burton

Ceist:

39. Deputy Joan Burton asked the Minister for Finance the progress made in supporting families in mortgage distress; his plans to further assist persons and families in mortgage difficulty and ensure they stay in the family home; if his attention has been drawn to the banks' failure to cut deals with mortgage holders in distress, including writing down loans; and if he will make a statement on the matter. [10337/17]

My question relates to the continuing refusal of banks to do deals with people who are in mortgage difficulties and the level of stress and pressure on relationships it is causing. Personal insolvency practitioners have drawn attention to a number of cases and I am personally aware of quite a number of cases. It seems as though the banks are simply not willing to engage, whether at the beginning of the process or after people have been involved in the mortgage arrears resolution process, MARP.

The Deputy will be aware that A Programme for a Partnership Government and the Action Plan for Housing and Homelessness set out the Government's priorities in relation to dealing with mortgage arrears.  The Deputy will also be aware of concerted efforts by the previous Government to resolve the mortgage arrears issue over a number of years, including revision of the Central Bank's code of conduct on mortgage arrears in the interests of fairness for consumers, overhaul of bankruptcy rules, introduction of personal insolvency legislation, establishment of a mortgage-to-rent scheme, and making available free access to up-to-date information about mortgage resolution options.  These options provide borrowers with the ability to restructure their debt in an orderly and sustainable manner. 

Following a request from me, the Central Bank completed its assessment of mortgage arrears and its report was published on the Department of Finance website last December.  The report noted that progress is well established in dealing with mortgage arrears and is clearly moving in the right direction.  The assessment finds a comprehensive range of available restructuring solutions being offered and delivered by both bank and non-bank entities.  The Central Bank considers the range of restructures offered by banks to be broadly appropriate in balancing consumer protections imperatives and maintaining a mortgage market for all borrowers and a functioning banking system. The assessment also found that overall there is strong evidence that banks and non-banks are looking to exhaust available options before moving into the legal process.

Mortgage arrears and repossessions data released by the Central Bank to the end of the third quarter of 2016 provide evidence that consistent progress is being made in addressing mortgage arrears, with the number of private dwelling house mortgage accounts in arrears continuing to fall for the 13th consecutive quarter.  In addition, over 121,000 private dwelling house mortgage accounts were classified as restructured, of which 88% were deemed to be meeting the terms of their restructure.  This shows that where borrowers actively engage with their lender with a view to agreeing a sustainable arrangement to address their mortgage arrears it is more likely that an equitable arrangement will be found.

Additional information not given on the floor of the House

The Deputy may also be aware of other initiatives being rolled out across Government such as the Abhaile mortgage arrears resolution service and amendments to the mortgage-to-rent scheme which will make the mortgage-to-rent process quicker, more transparent, easier to navigate for borrowers and ultimately more accessible to more households in mortgage distress.  Pilot projects to explore potential mechanisms that would facilitate investment into the residential market by private equity firms using the mortgage-to-rent model will be undertaken with a view to facilitating greater numbers of indebted borrowers to remain in their own homes as tenants.

Finally, I would encourage all borrowers in arrears to make contact with their bank or to seek assistance from their local Money Advice & Budgeting Service, MABS.

I wish to tell the Minister a little story of a family with three children, one of whom has specials needs, that I have dealt with over a number of years. The parents found themselves in difficulty with their mortgage despite the fact that both of them are working. One of them became ill due to the stress associated with trying to deal with the bank. When I was Minister for Social Protection I set up a scheme called Abhaile so that mortgage holders in distress would be helped by the Money Advice & Budgeting Service, MABS, which was authorised on a regional basis and a local basis to accompany people to court. As the Minister knows, because we discussed this in government over many a long month, it took a long time to set it up, but it is operating now as is the personal insolvency practitioner structure. However, despite all that, we hear back that, no matter what happens, banks are still reluctant to engage. In the particular case to which I referred, the family went through the full year of the mortgage arrears resolution process and paid everything that was required. Not only that, when the parents got a small increase in their income, they increased their payment. Nonetheless, and this is not atypical, the day the MARP period finished, during which, notwithstanding the difficulties they were in, they had agreed to everything and done everything that was required, the bank issued them with a notification stating that it would seek to repossess the house. In the Government that the Minister and I were members of, it was a primary principle that we would seek to protect people in their family homes. In this particular case, the bank included-----

Thank you, Deputy. You are way over time.

-----the €208 or so that the family was receiving in respect of domiciliary care allowance as income in the family's means assessment.

I must ask the Deputy to-----

I know the Minister does not get involved in individual cases.

This is a joke.

I will finish on this point.

The Deputy is more than a minute over time and has actually taken two minutes. Will she put her question very quickly, please?

Will the Minister examine some cases to see what banks are doing to people?

I have great sympathy for anyone in the circumstances outlined by the Deputy but I do not have the information she has so I cannot comment in detail on the case. What I know from the general principle is that the banks engage and that they have restructured 121,000 mortgages, which is proof of their engagement. They are making significant progress and for 13 consecutive quarters the number of mortgages in difficulty has gone down. Some of that is because of restructuring by the banks and some of it is because the economy is moving strongly and when people go back to work they re-engage and make their own arrangements because they have an income again to service the mortgage.

The Abhaile scheme to which the Deputy refers and for which she was largely responsible is very important. The amendments to the mortgage-to-rent scheme will make the mortgage-to-rent process quicker, more transparent, easier to navigate for borrowers and ultimately more accessible to more households in mortgage distress.  Mortgage distress is also important. A variation on that of which the Deputy is probably aware is that the Department of Housing, Planning, Community and Local Government is now examining the possibility of putting a fund together to purchase houses where there are mortgage difficulties and renting them back to the mortgage holder so that the local authority would no longer be the intermediary and that there would be a more efficient way of implementing the mortgage-to-rent scheme.

I ask Deputy Burton to be brief. She used up her time so I ask her to keep her comments very short.

I understand the Minister's appreciation of the issue. He did not mention one aspect which is that with a recovery in property prices, the level of distress in many mortgages is now automatically going down as the underlying security for the mortgage increases in value. Therefore, things are certainly improving. However, if we examine the reports from the personal insolvency practitioners throughout the country-----

-----they are indicating that it is extremely difficult to get banks to cut a deal. Further, arrangements that were reached with the banks in earlier years, where part of the loan was frozen or parked, are now coming up for review.

We need to know what will happen in these cases.

It is untrue to state the banks will not write off part of the money owed. They will do so but only on a case by case basis as opposed to a universal or across the line basis. People who are in difficulty should engage with their bank with the help of the best advice available or an insolvency practitioner. As I indicated, 121,000 mortgages have been restructured, of which 88% are standing up to the conditions. The test is that restructured mortgages must stand for at least 12 months before they are rated as successful restructuring. The Deputy could help out by bringing individual cases to lenders' attention. I understand banks are open to speaking to Deputies who are acting as intermediaries for borrowers.

We must move on to the next question.

May I make a point?

Question No. 40 taken with Question No. 37.